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Paid Family Leave: The Leading Democratic and Republican Proposals, Explained

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By Emily Zeppieri, The Fiscal Times

October 28, 2018

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Since 1993, the Family and Medical Leave Act (FMLA) has provided workers with the right to unpaid time off and guaranteed job security following qualified medical and family events, including childbirth, adoption and personal or family illness. While the legislation was a major victory for the nascent Clinton administration as the first federal law designed to help Americans balance the needs of the workplace with the needs of family, it had significant shortcomings, and paid family leave remains an important and contentious political issue to this day. After years of relative quiet on the issue, there has recently been growing interest in more comprehensive paid family leave policies, and politicians on both sides of the aisle have acknowledged the need for change.

The most significant limitations of the FMLA are the lack of compensation for employees who take time off and the limited scope of coverage. As former Treasury Secretary Robert E. Rubin wrote earlier this year in The Washington Post, “The FMLA has been used more than 200 million times by families, with relatively little burden on employers, but the law covers only about 60 percent of workers and only about a fifth of those who take leave are new mothers. ... It gives them up to 12 weeks of leave, but with no pay — an impossible situation for many employees.”​ Some individual states have developed plans over the years to provide income for workers on leave, but the vast majority of workers still do not have that option.

Numerous national and state-level organizations have argued that paid family leave would strengthen families and ultimately benefit the country as a whole. In a letter addressed to Congress last summer, the National Partnership for Women and Working Families stated that paid family leave “would help support working families’ economic security, promote gender equity in workplaces, create a more level playing field for businesses of all sizes and strengthen our economy.” ​The organization, a non-profit based in Washington, says that research shows that paid leave benefits both families and businesses in the form of potential savings and outcomes.

Conservative organizations have also expressed support for paid family leave. The Center for Public Justice, a Christian think tank, issued a report this summer stating, “Paid family leave is an important way to promote family life and family cohesion, particularly for the many households that cannot otherwise afford to elect family care over paid work.”

Yet while groups across the political spectrum have expressed interest in a more comprehensive family leave program, a viable plan has proved elusive. Efforts to find a legislative solution to the problem were renewed earlier this year, propelled by a growing awareness that leave without remuneration is insufficient and an interest by some influential Republicans to address this previously Democratic issue. While no single plan has become the clear favorite, two options have emerged that have dominated the parties’ discussions on the issue.

The Leading Democratic Proposal

​Originally introduced in 2013, the Family and Medical Leave Act was re-introduced by Sen. ​Kristen Gillibrand (D-NY) and Rep. Rosa DeLauro (D-CT) in 2017. Sen. Bernie Sanders (I-VT), who proposed a paid family leave plan in 2016, has since become a co-sponsor.

What it does: ​​​​Workers would be guaranteed partial wages for up to 12 weeks of time taken off for family or medical needs. Workers would be able to receive 66 percent of their monthly wages, up to a maximum amount of $4,000 per month.

What it costs: ​​The Institute for Women’s Policy Research, a nonpartisan research group, issued a report in January 2017 saying the plan would cost approximately $33 billion a year.

How it would be paid for:​​ ​Leave would be paid for through tax contributions from both employers and workers. Each would be required to pay the equivalent of two cents per $10 of earned income in the form of payroll deductions. The money raised from the payroll deductions would be deposited into a government-managed fund. A worker would be entitled to draw from the fund and use that money toward time off from work in the event of a covered medical or family need.

The Leading Republican Proposal​

The Economic Security for New Parents Act was introduced by Sen. Marco Rubio (R-FL) and Rep. Ann Wagner (R-MO) this year and has the support of senior White House adviser (and presidential daughter) Ivanka Trump.

What it does: ​​​​The act would allow parents to use their Social Security retirement benefits for a period of up to 12 weeks after the birth or adoption of a child. This proposal would not extend to other types of leave covered under the FMLA, such as care for a sick relative; recovery time from an illness or injury; or care for someone who had been in the military. New parents would be able to finance their leave by drawing on their Social Security benefits in an amount up to 70 percent of their current salary.

What it costs:​​ ​The Independent Women’s Forum ​estimated​ that the impact on Social Security’s finances would be relatively small, with approximately 2 million parents receiving $7 billion in benefits a year, compared with the $950 billion in outlays Social Security makes each year.

How it would be paid for:​​​​ There would be no new taxes under this proposal, as leave would be paid for by drawing on the Social Security benefits of the employee. The recipients would repay the advance by either postponing their retirement for a period of three to six months or by retiring at the usual time with a small but permanent reduction in their benefit. A draw on future Social Security benefits would be transferable between parents in a household.

“The Social Security approach would … amortize the cost of parental leave: Parents could collect a benefit at the time of a birth or adoption, but they would not have to ‘repay’ it until retirement. They would have decades to save to make up for the cost of their benefit,” Kristin Shapiro of the Independent Women’s Forum wrote in The New York Times.

Criticisms of the Plans

The Republican proposal has been criticized as potentially undermining the integrity of a system designed to provide basic retirement benefits for Americans. “Social Security advocates point out several downsides to this plan,” Michael Hiltzik said in The Los Angeles Times. “It would translate into an increase in the retirement age, which is inherently unfair to lower-income and African American workers. It will burden women more than men because they’re likelier to take parental leave and likelier to spend longer periods caring for their newborns at home. And it will place a new administrative load on the Social Security Administration, which is already struggling to work through budget cuts to deal with the responsibilities it has now.”

Many critics of the Democratic proposal are against the imposition of a new tax that would hit American workers whether they draw on the benefit or not. “[A] payroll tax would not magically lower the cost of a federal parental leave program. It would ‘rob’ from every paycheck, and workers would have no choice (not even a ‘false’ one) but to pay it. The tax might seem small, but it would cost thousands of dollars over the course of a lifetime — otherwise it would not sustain the program,” wrote Kristin Shapiro in the Times.

What’s Next

Advocates of paid family leave are encouraged that Republicans and Democrats have both put forth proposals, but there is still a wide divide between the two plans. While the U.S. may be edging toward a solution, the challenge remains in finding a viable financial arrangement that satisfies the very different philosophical approaches of Republican and Democratic lawmakers. In the current political climate, it’s unlikely that either proposal would receive enough support to pass. However, if Democrats are successful in winning back the House in next month’s midterm elections, paid family leave may move back onto the political agenda, especially if President Trump sees a divided Congress as an opportunity to start making bipartisan deals on policies that address the needs of a wide range of voters.